Wednesday, December 23, 2009

What is Solyndra’s Cost Per Watt? (SOLY; FSLR; TSL)

First Solar is the low cost leader although Trina has something to say* about the subject.From Greentech:

Solyndra’s module costs could be higher than their selling price. Or just under it.

Thin film solar vendor Solyndra (SOLY) was not exactly explicit in declaring their module price per watt in their recently filed S-1 (which we dissected in Part 1). In short, the company doesn't put the number in there. Trony Solar, which recently pulled its IPO, and others do.

Some simple math, which admitedly does not tell the full Solyndra story, yields some interesting numbers.

Solyndra's revenue in the nine months ending Oct 3 was $58.814 million and their cost of goods sold for the same period was $108.321 million for the total of 17.2 Megawatts of CIGS solar panels shipped in that period. Almost half of that revenue (49 per cent) came from three customers - USE Umwelt Sonne Energie, Carlisle Syntec and Alwitra.

That works out to:

A sale price of $3.42 per Watt

A cost of $6.29 per Watt

Note that in Solyndra's case, there is not an exact clear comparison with other flat panel modules - because what Solyndra considers a "module" includes some mounting equipment. Anup Jacob, a Solyndra investor at Virgin Green Fund, told us in August that the company's install costs come to around 50 cents a watt, lower than the $2 to $4 a watt install costs for other thin film companies. Arguably, the lower installations cost could drop Solyndra's cost per watt to anywhere from $4.79 to $2.79 ($6.29 minus $1.50 to $3.50 for the lower installation costs.) With a $3.42 sale price, that means Solyndra might be able to coax some profit from their billion dollar investment. Attention Wall Street: trying to figure this out with a straight face is why you pay high prices for hardworking, replaceable associates.

Compare this to First Solar. First Solar's average manufacturing cost per watt declined by $0.23 per watt, or 21.3%, from $1.08 in the three months ended September 27, 2008 to $0.85 in the three months ended September 26, 2009....MORE